The cost of building new motorway tunnels under Sydney Harbour has blown out by $1.4 billion amid an overheated construction market, adding to the list of mega transport projects across NSW that are outstripping their budgets.
New documents seen by the Herald reveal that the budgeted cost of the main construction works for the Western Harbour Tunnel between Rozelle and North Sydney has ballooned to $6.7 billion, up from $5.3 billion in 2019.
The Western Harbour Tunnel will extend from North Sydney to Rozelle.Credit: Dean Sewell
They show the previous Coalition government plugged the $1.4 billion gap for the three-lane motorway tunnels last year by taking on extra debt and reallocating some funding from other projects, including WestConnex, the Princes Highway upgrade and a program to electrify the state’s bus fleet.
The ballooning cost of the motorway project is being blamed on major cost pressures for construction. Including development and enabling works, the estimated total cost of the Western Harbour Tunnel is now almost $7.4 billion.
A spokesperson for the new Minns Labor government said it was receiving initial briefings to get a full picture of the challenges it had inherited.
“We said we would have an ambitious capital program. We are prioritising getting an understanding of the status of each project and, as we’re discovering, the true cost and state of these programs,” the spokesperson said.
One of the tunnels for the first stage of the Western Harbour Tunnel, which will connect to the WestConnex motorway at Rozelle. Credit: Brook Mitchell
Former NSW metropolitan roads minister Natalie Ward was approached for comment.
The ballooning budget for the Western Harbour Tunnel follows cost blowouts across a number of mega transport projects in NSW.
Last year the then-Coalition government admitted to a $400 million overrun in the first stage of the M6 motorway in southern Sydney, while its signature Metro City and Southwest rail line under the harbour and central business district blew out by $6 billion. The first stage of the Parramatta light rail line has surged by $475 million to nearly $2.9 billion.
The Herald also recently revealed that the cost of the state’s new fleet of Spanish-built passenger trains is set to blow out by more than $1 billion.
The 6.5-kilometre Western Harbour Tunnel, which will be tolled, is due to open to motorists in 2028, which is later than the original completion date of 2025-26.
The previous government decided last year to dig deeper tunnels for the main section of the motorway between Birchgrove and Waverton, ditching earlier plans to lay large tubes in a trench on the harbour floor. Construction of the first stage of the tunnels from a WestConnex interchange at Rozelle to Birchgrove began last July.
NSW Labor pledged during the election campaign to keep the Western Harbour Tunnel in public hands as part of a long-term strategy to increase the number of state-owned toll roads and reduce Transurban’s stranglehold on Sydney’s motorway network.
It also vowed to scrap plans for the multibillion-dollar Northern Beaches Link motorway tunnel from Cammeray to Balgowlah and Seaforth. The previous government announced last June the deferral of the Beaches Link due to rapidly escalating costs and labour shortages.
After campaigning heavily on the financial burden of Sydney’s toll roads, the new government last week commissioned former Australian Competition and Consumer Commission chair Allan Fels to lead a wide-ranging review of the motorway network.
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